The surprise pick comes after months of speculation over who the former Massachusetts governor would pick as his running mate ahead of November's election.

Ryan, a 42-year-old conservative who has become the leading Republican voice on spending cuts, was earlier confirmed by a Romney campaign app.

"Mitt's choice for VP is Paul Ryan. Spread the word about America's comeback team," it stated.

It confirmed rumours that had been circulating since late Friday, when it was announced that Romney's VP pick would be made public today.

Although long-talked of as a rising star, many people thought the Republican presidential candidate would have gone with a safer choice than Ryan.

Former Minnesota representative Tim Pawlenty and Ohio senator Rob Portman had both been talked of as potential candidates.

Having risen to national prominence as chair of the budget committee, Ryan is likely to be a popular pick with fiscally conservative Republicans who admire his attempts to propose bold budget cuts. But Democrats will be licking their lips at the prospect of Ryan's promotion, seeing him as the public face of threatened cuts to healthcare and welfare services through the so-called Ryan budget plan.

Romney's decision to announce his running mate at 8.45am ET on a Saturday, at an event in Norfolk, Virginia, threw America's political pundits into disarray, with no announcement expected until after the Olympics ended and certainly not in the relative dead time of a weekend morning.

But the Romney campaign has come under increasing pressure and some criticism from allies in the Republican party for a lacklustre campaign to date, with polls continuing to show a small but resilient lead for President Barack Obama despite the sagging economy.

Romney himself has been bedeviled by a series of gaffes and missteps, including his jibe at the readiness of the London Olympics organisation, and has been unable to throw off controversies over his own tax returns. The Republican candidate refuses to release more than the last two years of his tax returns, leading some – including the Democratic Senate majority leader Harry Reid – to speculate at what the wealthy Massachusetts financier might be hiding.

The choice of Ryan will delight conservatives such as the editorial board of the Wall Street Journal, which recently urged Romney to pick the seven-term congressman, saying that Ryan "best exemplifies the nature and stakes of this election. More than any other politician, the House budget chairman has defined those stakes well as a generational choice about the role of government and whether America will once again become a growth economy or sink into interest-group dominated decline."

Reaction from Democrats was swift and savage. "If it's really Ryan, Romney will have picked one of the only people who could have had an impact in the race. But, not the way he wants," tweeted Bill Burton, head of the Obama-supporting Priorities USA action committee.

One early hint of Romney's choice was the venue: aboard the warship the USS Wisconsin, named after Ryan's home state.

Ryan's relative youth belies his influence within the congressional Republican party, as head of the influential Budget committee but also as the party's policy-maker advocating once unthinkable ideas such as converting government-funded healthcare known as Medicaid into a voucher-like system to slash costs.

The choice of Ryan, however, means Romney has spurned more attractive alternatives who would appeal to a wider pool of voters, such as the rising star of the Republican party, Marco Rubio of Florida, the more experienced Condoleeza Rice, or the robust New Jersey governor Chris Christie, another favourite of Republican grassroots.

Ryan's career is almost entirely within Washington DC and Capitol Hill, likely to subtract from Romney's claim that he represents an outsider's view of Washington and its politics.

The announcement comes at the start of a four-day bus tour by Romney to visit crucial swing states including Virginia, North Carolina Florida and Ohio, and will be used as a chance to introduce the relatively unknown Ryan to the US public.